Power & Market

The Reforms that Venezuela Needs Right Now

Venezuela’s government is in a state of upheaval. Foreign nations are lining up to support either the regime of Nicolás Maduro — who claims to be the legitimately elected president — or that of Juan Guaidó, who the opposition claims is now the constitutionally mandated interim president.

The current situation has been brought on by nearly twenty years of Chavismo, a hard-left socialist ideology, which has left the Venezuelan economy in ruins.

Understandably, many Venezuelans are now hoping for a political change. and many believe no real change can be had until the current regime is gone.

But no matter who is president a week — or a year, or five years — from now, prosperity can only be regained by enormous reforms to the Venezuelan political and economic systems.

Venezuelans must act now to demand these changes, because bringing in new politicians won’t be enough to turn the nation around:

  1. Open the road to monetary freedom, eliminating all legal tender laws and the nation’s central-bank supported system of fractional-reserve banks. Allow Venezuelans to adopt whatever medium of exchange they wish. Even dollarization ought to be on the table.
  2. Open the country to International Trade: eliminate all tariffs, taxes, and trade barriers. All of them.
  3. Privatize Everything! All state-owned companies and assets, following Econintech’s proposal.
  4. Decentralize the Government: Grant total administrative and budgetary autonomy to Venezuela’s twenty-three states . Decentralization is a key to minimizing the damage an abuse central government can do.
  5. Lower taxes drastically, and decentralize tax collection and administration to the state level. All new taxes must be approved by referendum.
  6. Allow private Venezuelans to access and accept both humanitarian and security assistance from foreign organizations.
  7. Guarantee the right to self-defense: demobilize all the armed groups, purge the prisons, implement widespread private gun ownership, and auction to the public all weapons confiscated by the state.

Should Venezuela finally move toward real reform, Venezuela could reclaim its position as one of the most prosperous nations in Latin America. At times like this, Venezuelans can look at former communist countries — such as Poland — that applied radical free-market reforms and now are moving toward a far more prosperous future.

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